SHERRY BEBITCH JEFFE, fellow, USC Price School of Public Policy, and DOUGLAS JEFFE.
This op-ed originally appeared at Reuters.
California is on the verge of becoming a one-party state — but policy gridlock isn’t going anywhere soon.
Democrats now hold all the statewide offices and have a shot Tuesday at achieving two-thirds majorities in the Legislature. Yet they are far from being able to unilaterally resolve California’s fiscal logjam.
For the past decade, California’s fiscal picture has been awash in red ink, legislative stalemates, borrowing and a lot of budgetary gimmickry. Three governors in a row, Gray Davis, Arnold Schwarzenegger and Jerry Brown, hit a stone wall in trying to resolve the state’s structural deficit—the imbalance between ongoing spending and available tax revenues — that has persisted in the $10-billion plus range.
Though both houses of the state Legislature have been securely in Democratic hands, they are unable to address these serious problems. Under the state constitution, a two-thirds supermajority has been needed to pass the budget and raise taxes, which gives the small Republican caucuses de facto veto power.
California voters finally reduced the budget vote requirement to a simple majority in 2010. But they kept the two-thirds hurdle for new revenues. It is this last piece of Republican leverage that Democrats hope to erase on Tuesday.
For most of the past half-century, Democrats held solid majorities in both the California Assembly and Senate. Republicans like Ronald Reagan, George Deukmejian, Pete Wilson and sort-of Republican Schwarzenegger have been able to win the governorship. But the GOP legislative contingents have grown smaller each election — and far more conservative.
At this point, Grover Norquist, with his anti-tax mantra, is perhaps the most potent force in California GOP politics. Moderate Republicans in elective offices are rarer than the state’s endangered condors. In the traditional closed primary system, signing a “No New Taxes” pledge became a prerequisite in competing for GOP nominations up and down the ballot.
As long as Republicans were able to keep Democratic legislative majorities below the two-thirds threshold, meaningful tax increases were off the table, even when volatile economic conditions produced revenue shortfalls and increased demand for services.
In the few instances when individual Republican lawmakers or caucus leaders agreed to supply votes to pass compromise budgets that included some tax increases, they were rewarded by having their political careers torpedoed. It became an annual ritual — when GOP legislative leaders participated in negotiations with the governor and Democratic leaders, they were stripped of their caucus positions in the aftermath.
Despite, or because of, its success at blocking the budgetary process, the California Republican Party has become less competitive — and more isolated. Its perceived hostility to immigrant communities has given Democrats a huge boost in garnering votes from the Golden State’s fastest growing population groups — Latinos and Asians.
California Republicans now hold no statewide elected offices. The GOP mounted virtually no challenge to Senator Diane Feinstein as she seeks reelection. Nationally, the state is regarded as deep blue. Democratic nominees have swept California in the last five presidential elections and are poised to give President Barack Obama another double-digit margin on Tuesday.
One major reason Republicans have been able to maintain their hold on at least one third of the legislative districts over the last decade is a much maligned “grand bargain” reached by then-Governor Gray Davis and the Legislature, after the 2000 Census. This new reapportionment plan froze incumbents in place and made districts held by both parties in the Legislature and Congress more favorable to the incumbent party.
Since this deal, only one congressional seat has changed party. Party turnover in state legislative seats was also rare — despite term limits. Democrats now outnumber Republicans 25-15 in the state Senate and 52-28 in the Assembly.
But this electoral status quo was shaken up this year because of the initiatives passed in 2008 and 2010. Instead of letting politicians draw the usual safe district lines, the 2011 reapportionment plan was drawn by a nonpartisan citizens’ commission. The closed primary system was replaced by a “top-two” system that pits the two leading vote getters, regardless of party affiliation, against each other in the general election. These new rules of the game have reshuffled the deck.
According to the California Target Book, which tracks races district by district, Democrats still have a lock on 48 Assembly seats, but now need to win six of eight competitive races to reach a two-thirds majority. In the state Senate, Democrats have 24 solid seats, and need to win three of five competitive contests to hit two-thirds.
Conventional wisdom is that Democrats on Tuesday are favored to pass the two-thirds threshold in the Senate, but fall short in the Assembly.
The crucial question now is whether a two-thirds Democratic majority in the Legislature will really matter in addressing California’s fiscal mess.
Despite the state’s chronic budget problems and high unemployment rate, it’s hardly an economic basket case. The gross state product hovers around $2 trillion and California’s economy is one of the 10 largest in the world. Yet the state remains mired in fiscal chaos.
Through the initiative process, voters have seized control of the purse strings. In 1978, Proposition 13 cut property tax revenues and froze rates. It also shifted fiscal decision-making to Sacramento. In 1988, Proposition 98, sponsored by the California Teachers Association, effectively gave education a hammerlock on state revenues–hamstringing the budget process without meeting education needs.
The state’s infrastructure, schools and higher education systems are all now chronically under-funded. Powerful public employee unions, which finance Democratic campaigns, have signed pension and compensation deals that threaten to bleed state and local coffers dry. The post-Proposition 13 dependence on income and sales taxes, meanwhile, has distorted the state’s finances — producing huge windfalls in boom times (dot com bubble, housing bubble, etc.) and falling flat when the economy struggles.
Brown was elected two years ago to provide adult supervision and restore fiscal sanity. But his efforts to woo Republicans off their “no new taxes” stance failed, partly because public employee unions balked at serious pension reform as part of the package. He is now pushing Proposition 30, to provide temporary income tax increases on higher earners and a modest bump in the sales taxes.
This initiative is now hanging by a thread, in the face of opposition advertising bankrolled by big-money, independent expenditure committees. If it fails, a number of Democratic legislators, worried about their next campaign, will likely be loath to support new tax increases–whether or not Democrats have a two-thirds legislative majority.
But if proposed budget cuts shorten the school year, raise tuition even higher at state colleges and universities and cause first responders to start taking a lot longer to show up, then California officeholders and voters may gain the will to get the state’s fiscal house in order.
But even a Democratic supermajority can’t do the job alone in California. It will take the public’s buy in.